REFLECTIONS ON LABOR MEASURES INTENDED TO CONFRONT THE CORONAVIRUS

Brazil

03/25/2020

On 03/22/2020, Provisional Act (MP) 927/2020 was issued, which brought important news to confront the state of public calamity due to COVID-19 (Coronavirus), with the goal of establishing alternatives for coping with preserving the workers’ jobs and income.

MEASURES IMPLEMENTED: teleworking; advancing individual vacation; assigning collective vacation; using and moving forward of holidays; the hour bank; suspension of administrative requirements for health and safety at work (we draw attention to this item below); directing the worker to qualification; and deferral of payment of the Employment Security Fund for Employees – FGTS.

Other points dealt with in MP 927/2020 refer to:

1. Suspension of the requirement for periodic examinations, with the exception of dismissal examination and exceptional situations recommended by the medical coordinator of the medical control and occupational health program. Medical examinations must be carried out within 60 (sixty) days after the state of public calamity has ended;

2. Possibility of extending the CIPA (Internal Committee for Accident Prevention) term of office;

3. Deferral of the FGTS payment for the months of March, April and May 2020. The mentioned amounts may be paid in installments as of July/2020;

4. Specific forecasts for the extension of working hours, including with regard to 12×36 scales and working hours intervals;

5. Suspension for 180 days of the deadlines for the presentation of defense and appeals in the context of administrative proceedings originating from labor infringement and FGTS debit assessment notices;

6. Possibility of extending collective bargaining agreements and covenants for a period of 90 days;

7. Advance payment of the 2020 annual allowance;

8. Measures adopted in the period by employers and which are not contrary to the terms of MP 927 have remained validated, and

9. Expiry date of 180 days from its issuance for a certificate issued jointly by the Special Federal Revenue Service of Brazil and the Attorneys’ General Department of the National Treasury of the Ministry of the Economy.

POINTS OF ATTENTIONANDLEGALSECURITY

It is important to say that in this moment of great movement and socioeconomic impact, any and all measures must be preceded by a strategic assessment. Disclosure by the media about the applicable measures could lead to hasty interpretations and, therefore, it is important to have an interdisciplinary assessment of the topic.

ALTERNATIVESFORLABORRELATIONS

Despite the insecurity generated by the partial revocation of the MP, with caution, empathy and objective assessment of the measures in the face of business conditions, we understand that there are valid tools to mitigate the instruments in labor relations.

Let us see some alternative measures that can be implemented, considering the specific situations:

Remote Work / Telework
This is the option that has been most adopted. We recommend that an agreement/policy be drawn up with the employee to clarify the context of the home office activities due to the COVID 19 crisis situation, rules on working hours control, guidelines regarding ergonomics and if there will be any type of financial compensation. The change must be communicated at least 48 (forty-eight) hours in advance, and may include trainees, interns and apprentices.

Individual Vacation

It is feasible to grant vacation to the employees, even if the 30-day period provided for in Article 135 of the CLT (Consolidation of Labor Laws) is not observed and in the event that the employee has not completed the acquisition period. These aspects have been validated by MP 927/2020. Minimum period of 5 days. Future vacation periods may be negotiated between employees and employers pursuant to an individual agreement; however this practice deserves caution, considering that vacation has the nature of protecting the employee’s health, and it is not advisable for a long period without enjoying the respective rest. There are specific provisions regarding the form of vacation pay plus the constitutional 1/3.

Interruption of Service Provision and Future Working Hours Compensation

Under the terms of article 61, paragraph 3, of the CLT, whenever interruption of work occurs, resulting from accidental causes, or force majeure (as is the case of the coronavirus), which determines the impossibility of its performance, the duration of work may be extended by the necessary time up to a maximum of 2 (two) hours, during the number of days necessary for the recovery of lost time, provided that it does not exceed 10 (ten) hours per day, in a period not exceeding 45 (forty-five) days in a year, subject to this recovery with the prior authorization of the competent authority. We suggest that such measure be previously negotiated with the relevant Union, in order to specifically provide for the conditions that will be observed both in the period of withdrawal and in the respective return.

Hours Bank
The Hours Bank may be used as a way to equalize workflows, with a forecast of workday compensation within 18 (eighteen) months, counting from the date of the closure of the state of public calamity. Only the strict terms of the signed collective agreement or individual adjustment, according to the case, must be observed.

Using and Moving Holidays Forward

Non-religious holidays may be moved forward by employees, through written or electronic communication, at least 48 (forty-eight) hours in advance, indicating the holidays that will be compensated.

Religious holidays can only be compensated with the employee’s agreement and individual written agreement.

Collective Vacation

Another alternative would be the adoption of collective vacation, especially in the case of closing stores. MP 927 provides for that vacation may be communicated 48 (forty-eight) hours in advance, without the need of prior notice to the local agency of the Ministry of the Economy and the Category Workers’ Union.

Collective vacation may be granted to all employees of a company or certain establishments or sectors of the company.

Unpaid Leave and Reduced Working Hours

In Brazil, the “lay-off” doctrine is achieved with (i) suspension of the employment contract (unpaid leave) or (ii) reduction of the workday proportional to the salary. In both cases, validity will depend on collective bargaining.

In the event of suspension, article 476-A of the CLT regulates this possibility by binding it to the employee’s professional qualification and with a duration of 2 to 5 months.

Article 18, revoked from MP 927/2020, through MP 928/2020 published on March 23, one day after the announcement of 927, dealt with the subject waiving for collective bargaining, providing for that (I) the qualification should be given non-face-to-face, (II) it should last up to 4 months, (III) waiver of the provision by means of collective agreement or convention, (IV) can be carried out by individual agreement; and (V) must be registered in the CTPS (worker’s registrations card) physically or electronically. Monthly compensation may be provided by the employer without a salary nature, and the benefits voluntarily granted should be maintained.

In the event of non-compliance with the determinations or in the case that the employee provides services during the period, penalties were established, including regarding the payment of salaries for the period and resulting charges and penalties.

However, as already mentioned, such provision has been revoked. Therefore, there is no legal certainty yet on the subject, reinforcing the uncertain scenario that awaits us with regard to public health, the country’s financial situation and before the Judiciary.

We should still have new developments on the subject, but we already point out that the Labor area of our firm will be pleased to deal with specific situations, making the electronic address hotline.coronavirus@azevedosette.com.br available as a consultation channel.